UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004.
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSACTION PERIOD FROM TO
COMMISSION FILE NUMBER
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-4056901
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2180 STATE ROAD 434 WEST SUITE 4150 LONGWOOD, FLORIDA 32779
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(407) 682-5051
(ISSUER'S TELEPHONE NUMBER)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes _X_ No___
The registrant had 6,721,913 shares of common stock, $0.01 par value,
outstanding as of NOVEMBER 12, 2004.
Transitional Small Business Disclosure Format (check one):
Yes___ No_X_
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of September 30, 2004
(Unaudited) and December 31, 2003 (Audited) 1
Consolidated Condensed Income Statements (Unaudited)for the
Three Months and Nine Months Ended September 30, 2004 and 2003 3
Consolidated Condensed Statements of Cash Flows (Unaudited) for the
Three Months and Nine Months Ended September 30, 2004 and 2003 4
Notes to Unaudited Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis or Plan of Operation 6
Item 3. Controls and Procedures 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
SEPTEMBER 30, DECEMBER 31,
2004 2003
(UNAUDITED) (AUDITED)
CURRENT ASSETS:
Cash $ 1,157,408 $ 798,067
Accounts receivable, net of allowance for
doubtful accounts of $9,800 817,238 605,074
Employee advances 2,000 1,000
Prepaid expense 19,242 16,208
---------- ----------
TOTAL CURRENT ASSETS 1,995,888 1,420,349
Property and equipment, net 140,314 144,780
Other assets:
Security deposits 5,835 5,835
Goodwill 125,543 125,543
Intangible assets, net 134,961 --
Loan fees, net 900 470
Deferred taxes -- 36,095
---------- ----------
TOTAL OTHER ASSETS 267,239 167,943
---------- ----------
TOTAL ASSETS $ 2,403,441 $ 1,733,072
=========== ===========
Page 1
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31,
2004 2003
(UNAUDITED) (AUDITED)
Current liabilities:
Line of credit $ -- $ 403
Current maturities of capital lease obligations 5,085 12,168
Accounts payable 214,819 154,310
Accrued expenses 120,833 54,577
Income taxes payable 43,894 916
Deferred taxes 276,969 188,093
----------- -----------
TOTAL CURRENT LIABILITIES 661,600 410,467
Other liabilities:
Capital lease obligations, less current maturities -- 3,270
----------- -----------
TOTAL LIABILITIES 661,600 413,737
Commitments -- --
Stockholders' equity:
Preferred stock -- --
Common stock 67,219 67,219
Additional paid-in-capital 1,326,953 1,326,953
Retained earnings (accumulated deficit) 347,669 (74,837)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,741,841 1,319,335
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,403,441 $ 1,733,072
=========== ===========
See accompanying notes to consolidated condensed financial statements.
Page 2
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED INCOME STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
--------------------------------------------------------
Revenue $ 1,401,698 $ 1,342,168 $ 3,928,636 $ 3,391,299
Cost of services 839,962 946,624 2,566,321 2,372,850
----------- ----------- ----------- -----------
Gross profit 561,736 395,544 1,362,315 1,018,449
----------- ----------- ----------- -----------
Operating expenses:
General & administrative 259,775 185,253 680,083 636,817
----------- ----------- ----------- -----------
Operating income 301,961 210,291 682,232 381,632
Other income (expense):
Other income -- -- -- 2,102
Amortization expense (112) (651) (583) (1,601)
Interest expense, net 1,309 (202) 1,527 (965)
Other expense -- (2,100) (3,571) (7,809)
----------- ----------- ----------- -----------
1,197 (2,953) (2,627) (8,273)
----------- ----------- ----------- -----------
Income before income taxes 303,158 207,338 679,605 373,359
Income tax 114,813 52,005 257,099 115,377
----------- ----------- ----------- -----------
Net income $ 188,345 $ 155,333 $ 422,506 $ 257,982
=========== =========== =========== ===========
Weighted average number of common
Shares outstanding, basic and diluted 6,721,913 6,721,913 6,721,913 6,708,681
=========== =========== =========== ===========
Net income per share, basic and diluted $ 0.03 $ 0.02 $ 0.06 $ 0.04
=========== =========== =========== ===========
See accompanying notes to consolidated condensed financial statements.
Page 3
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ -----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
------------------------------ -----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 188,345 $ 155,333 $ 422,506 $ 257,984
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 25,715 53,597 72,310 157,978
Provision for deferred income taxes 43,930 52,005 124,971 116,349
Changes in current assets and liabilities (71,909) (63,965) (110,636) (349,530)
--------- --------- --------- ---------
Total adjustments (2,264) 41,638 86,645 (75,203)
--------- --------- --------- ---------
Net cash provided by operating activities 186,081 196,970 509,151 182,781
Cash flows from investing activities:
Purchase of intangible asset (70,780) -- (70,780) --
Purchases of property and equipment (37,332) (13,272) (68,274) (43,521)
--------- --------- --------- ---------
Net cash used in financing activities (108,112) (13,272) (139,054) (43,521)
Cash flows from financing activities:
Repayments on capital lease obligations (3,015) (3,321) (10,353) (9,588)
Net repayments on lines of credit -- (1,198) (403) (71,139)
--------- --------- --------- ---------
Net cash (used in) provided by financing activities (3,015) (4,519) (10,756) (80,727)
--------- --------- --------- ---------
Net increase 74,954 179,179 359,341 58,533
Cash - beginning of period 1,082,454 240,003 798,067 360,649
--------- --------- -------- ---------
Cash - end of period $ 1,157,408 $ 419,182 $ 1,157,408 $ 419,182
=========== ========= =========== =========
Supplemental disclosures:
Interest paid $ -- $ 202 $ 46 $ 965
========= ========= ========= ==========
Income taxes paid $ 72,275 $ -- $ 89,151 $ 25,528
========= ========= ========= ==========
Non-cash financing activities:
Issuance of common stock from other
current liabilities $ -- $ -- $ -- $ 8,077
========= ========= ========= =========
Issuance of common stock through
paid-in capital $ -- $ -- $ -- $ 273
========= ========= ========= =========
Intangible asset acquired through
issuance of payable $ 64,181 $ -- $ 64,181 $ --
========= ========= ========= =========
See accompanying notes to consolidated condensed financial statements
Page 4
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS FOR PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete statements. Management believes that all adjustments, specifically
normal recurring adjustments, necessary for a fair presentation of such
financial statements have been included. The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The financial statements included herein should be read in conjunction with the
financial statements included in the Company's Form 10-KSB for the fiscal year
ended December 31, 2003 filed with the Securities and Exchange Commission on
March 30, 2004.
2. RECENT FINANCIAL ACCOUNTING STANDARDS
In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, Consolidation of Variable Interest Entities
("Interpretation No. 46"). In general, a variable interest entity is a
corporation, partnership, trust, or any other legal structure used for business
purposes that either does not have equity investors with voting rights or has
equity investors that do not provide sufficient financial resources for the
entity to support its activities. Interpretation No. 46 requires a variable
interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's activities or
is entitled to receive a majority of the entity's residual returns or both. The
Company does not expect that Interpretation No. 46 will have a material effect
on the Company's results of operations or financial condition as the Company
does not currently utilize or have interests in any variable interest entities.
In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity ("SFAS No. 150"). SFAS No. 150 establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, except for
mandatory redeemable financial instruments. Mandatory redeemable financial
instruments are subject to the provisions of SFAS No. 150 beginning as of
January 1, 2004. The Company adopted SFAS No. 150 on June 1, 2003. The adoption
of SFAS No. 150 did not have a material effect on the Company's results of
operations or financial condition.
In December 2003, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 104 ("SAB No. 104"), Revenue Recognition. SAB No. 104
revises or rescinds portions of the interpretive guidance included in Topic 13
of the codification of staff accounting bulletins in order to make this
interpretive guidance consistent with current authoritative accounting and
auditing guidance and SEC rules and regulations. The Company periodically
evaluates its revenue recognition policies in relation to staff accounting
bulletins and other generally accepted accounting principles and SEC guidance.
The Company believes its revenue recognition policies are in compliance with the
provisions of SAB No. 104.
3. Intangible asset
As of September 30, 2004, the Company executed a buyout option under a drug
testing fee agreement with Global Screening, Inc. in the amount of $138,520. The
intangible asset has been capitalized and will be amortized over three years
commencing October 1, 2004. In addition, $64,181 is due to Global Screening,
Inc. as of September 30, 2004 which is included in accrued expenses.
Page 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The following discussion should be read in conjunction with, and is qualified in
its entirety by, the unaudited financial statements and the notes thereto
included in this Quarterly Report on Form 10-QSB. This report contains
forward-looking statements. The term, "forward-looking statements," is defined
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this Report as well as
our other filings with the Securities and Exchange Commission, press releases
and oral statements, words or phrases such as "believes", "anticipates",
"expects", "intends", "will likely result in", "estimates", "projects" or
similar expressions are intended to denote forward-looking statements. The
possible results that may be suggested by forward-looking statements are subject
to risks and uncertainties that may cause actual results to differ materially.
Some of the factors which might cause such differences include, without
limitation, risks associated with expansion of marketing efforts; limited sales
and marketing experiences; heightened competition; general economic and business
conditions; our ability or inability to implement our business strategy and/or
maintain our cost efficiency; dependence on proprietary technology, including,
without limitation, the adequacy of trade secret protection; continued
availability of key personnel; retention of key personnel and recruitment of
additional qualified skilled personnel.
Accufacts was incorporated in 1996 for the purpose of providing
pre-employment/background information on candidate hires for our clients. On
August 31, 1998, Accufacts consummated a merger with a public shell, Southern
Cargo Company ("Southern"), a Florida corporation. Southern, concurrent with
this merger, changed its name to Accufacts Pre-Employment Screening Inc.("APES")
and re-incorporated in the State of Delaware. Under the terms of the merger all
of the outstanding shares of Accufacts were acquired by Southern in exchange for
3,750,000 shares of Southern's $.01 par value common stock. This transaction was
accounted for as a reverse acquisition whereby, for accounting purposes,
Accufacts was the acquirer.
On October 13, 1999, Accufacts acquired all of the net assets of Maglio, Inc.
("Maglio"), a Florida corporation, by merging Maglio with and into
Maglio-Accufacts Pre-Employment Screening, Inc., a wholly-owned subsidiary
established by Accufacts. The acquisition was accounted for using the purchase
method of accounting and was completed by issuing 177,471 shares of APES common
stock consisting of 174,971 shares of common stock in consideration for the
acquisition and 2,500 shares of common stock in consideration for a stockholder
of Maglio entering into a non-compete agreement. The excess of the purchase
price over the fair value of the net assets acquired was $141,125. At the
adoption of SFAS 142, the unamortized balance of net assets acquired was
$125,543. The fair value of the non-competition agreement was $5,313 and was
amortized using the straight-line method over the term of the agreement.
In general, Accufacts' business provides a variety of background reports
regarding client employee candidates. These may include such items as: criminal
background checks, social security number verifications, employment
verifications, professional license verifications, education verifications,
credit reports, driving records, and other related reports. We believe that
obtaining such background checks is a proven, prudent part of a client's hiring
process. Falsification of employment application data is not uncommon, and
courts have in certain circumstances held employers liable for harm caused by
employees, especially when there is a pattern of behavior. Furthermore,
statistics indicate that pre-employment screenings lead to increased employee
integrity and decreased turnover, which improves client business performance.
The market for background checks/pre-employment screenings is highly
competitive. Most competitors are small local firms, but a few large national
companies exist in the market. Accufacts competes on both levels. Overall, we
have successfully developed proprietary software tools incorporating the latest
technologies. This enables our clients to submit orders and track the status of
the research at any time. We customize reports upon request. We also have an
automated client service program that is available on-line, 24 hours a day,
every day. We believe this ensures the fastest response and best client support
available.
Page 6
CRITICAL ACCOUNTING POLICIES
Accufacts' significant accounting policies, including the assumptions and
judgments underlying them, are more fully described in the footnotes to our
financial statements at December 31, 2003. Some of Accufacts' accounting
policies require the application of significant judgment by management in the
preparation of the financial statements, and as a result, they are subject to a
greater degree of uncertainty. In applying these policies, management uses its
judgment to determine the appropriate assumptions to be used in calculating
estimates that affect the reported amounts of assets, liabilities, revenues and
expenses.
Management bases its estimates and assumptions on historical experience and on
various other factors that are believed to be reasonable under the
circumstances. Accufacts has identified certain of its accounting policies as
the ones that are most important to the portrayal of Accufacts' financial
condition and results of operations, and which require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Accufacts' critical
accounting policies include the following:
REVENUE RECOGNITION
Revenue is recognized at the time of performance of service.
ACCOUNTING FOR INTANGIBLE AND LONG-LIVED ASSETS
In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets,
"Accufacts conducts annual impairment tests of goodwill recorded on its books in
order to determine if any impairment of value may have taken place. Impairment
tests will be conducted sooner if circumstances indicate that impairment may
have occurred. At its annual evaluation of its goodwill, Accufacts determined
that such assets were not impaired.
Intangible assets with finite useful lives, which primarily consist of customer
lists and non-competition covenants, continue to be amortized on a straight-line
basis. Customer lists are amortized over three to five years. Non-competition
covenants are amortized over the lives of the respective agreements, generally
three years.
In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets," Accufacts tests its long-lived assets, other than goodwill
and indefinite-lived intangible assets, for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may
not be recoverable. The value of a long-lived asset is impaired if the carrying
value of the asset exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. An impairment loss
will be measured as the amount by which the carrying amount of a long-lived
asset exceeds its fair value.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not maintain off-balance sheet arrangements nor does it
participate in non-exchange traded contracts requiring fair value accounting
treatment.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30,2003:
Revenues for the three months ended September 30, 2004 were $1,401,698, up $
59,530, or 4.4%, over revenues for the three months ended September 30, 2003,
which were $1,342,168. This increase was the result of ongoing business
development efforts and marketing initiatives. Increased revenues were realized
late in the third quarter related to the Company obtaining a few large new
customer accounts.
Cost of services for the three months ended September 30, 2004 were $839,962,
down $ 106,662, or 11.3%, from cost of services for the three months ended
September 30, 2003, which were $946,624. This decrease is mainly related to the
capitalization of previous payments made for an acquisition of a customer list
which was acquired on terms during the third quarter. This decrease is also due
in part to a reduction in depreciation expense associated with the Company's
proprietary decision support software initially developed in the year 2000. The
original capitalization of the Company's proprietary decision support software
occurred over three years ago and it has since been fully depreciated in
accordance with generally accepted accounting principles.
General and administrative expenses for the three months ended September 30,
2004 were $259,775, up $74,522, or 40.2%, over the three months ended September
30, 2003, which were $185,253. This increase is generally due to an increase in
officer and sales personnel compensation. Officer salaries have increased in
order to compensate the individuals responsible for the improved operating
results of the Company. Sales salaries have increased in line with the increase
in business development efforts and marketing initiatives.
Operating income for the quarter ended September 30, 2004 was $301,961, an
increase of $91,670 from operating income for the three months ended September
30, 2003, which was $210,291. Income before income taxes for the period was
$303,158, compared to $207,338 for the three month period ended September 30,
2003. The Company intends to increase its business through the use of operating
profits and borrowings. The Company believes that its anticipated cash flow from
operations as well as availability of funds from existing bank facilities will
provide the liquidity to meet current foreseeable cash needs for the next 12
months.
Page 7
NINE MONTHS ENDED SEPTEMBER 30,2004 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2003:
Revenues for the nine months ended September 30, 2004 were $ 3,928,636, versus
$3,391,299 for the nine months ended September 30, 2003. This is an increase of
$537,337, or 15.8% for the period. This increase was the result of ongoing
business development efforts and marketing initiatives coupled with the increase
associated with the higher customer billing levels stemming from the State of
New York court fee cost increases. The court fee cost increases were passed on
to our customers through increased price levels consistent with other companies
in the industry.
Cost of services for the nine months ended September 30, 2004 were $2,566,321,
up $ 193,471, or 8.1% from the cost of services for the nine months ended
September 30, 2003, which were $2,372,850. This increase, for the most part,
corresponds to the increase in court fees associated with providing services.
General and Administrative costs for the nine month period ended September 30,
2004 were $ 680,083 compared with $ 636,817 for the same period in 2003. This is
a increase of $ 43,266, or 6.8% from the nine month period in 2003. As mentioned
above, this increase is generally due to an increase in officer and sales
personnel compensation.
Operating income for the nine months ended September 30, 2004 was $682,232,
compared to operating income of $381,632 for the same period in 2003. Income
before income taxes for the nine months ended September 30, 2004 was $679,605,
compared to $373,359 for the same period ended September 30, 2003. As a result,
the Company realized net income per share of $0.06 compared to $0.04 for the
same period in 2003.
Net cash provided by operating activities for the nine months ended September
30, 2004 was $512,709, compared to net cash provided by operations of $182,781
for the nine month period ended September 30, 2003. Ending cash for the nine
months ended September 30, 2004 was $1,157,408 compared to ending cash for the
same period in 2003 of $419,182.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2004, Accufacts had total assets of $2,403,441, compared with
$1,733,072 at December 31, 2003, representing an increase in assets of $670,369,
or 38.7%. The majority of this increase relates to an increase in cash balances
of $359,341, which is directly attributable to the Company's ability to
continually improve their operating income levels each quarter from last year.
For the same periods, the Company had total liabilities of $ 661,600 at
September 30, 2004 compared to $413,737 at December 31, 2003, reflecting a
increase of $ 247,863, or 59.9%. The increase in total liabilities is mostly due
to an increase of $60,509 in accounts payable balances, an increase of $66,256
in accrued expense balances and an increase in deferred tax liabilities of
$88,876. As mentioned above, the increase in accounts payable balances were also
attributable to the increase in court fees associated with providing services
and are in line with the increase in overall revenues and cost of services for
the nine months ended September 30, 2004. The majority of the increase in
accrued expense balances relates to the acquisition of a customer list which was
acquired on terms during the third quarter. The increase in deferred tax
liabilities stems from the Company's past net operating losses being used up by
the current positive results of operations coupled with the increase in the
amount of the cash versus accrual timing differences as the Company continues to
grow.
The Company has a $25,000 business checking/overdraft line of credit. As of
September 30, 2004, there was $0 outstanding on this line of credit. It bears
interest at the prime rate plus 6.0% and is collateralized by the assets of the
Company. Effective August 12, 2003, the Company obtained an additional $400,000
line of credit with a bank. The line of credit matures May 1, 2005 and can be
renewed annually subject to certain conditions and covenants. The line of credit
bears interest at prime plus 1.0%. Interest is payable monthly. The line of
credit is collateralized by substantially all of the assets of the Company and
is personally guaranteed by the majority stockholder and president of the
Company. As of September 30, 2004, there was $0 outstanding on this line of
credit.
Management is continuing to refine operations with a focus toward increasing
revenues through aggressive marketing initiatives and generating a continuous
stream of positive earnings. We believe that the Company is poised to leverage
competitive advantages and generate continued profitable growth.
ITEM 3. Controls and Procedures.
The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the executive officer of the Company concluded that the Company's
disclosure controls and procedures were adequate.
There have not been any significant changes in the Company's internal controls
or other factors that could affect these controls subsequent to the date of
evaluation.
Page 8
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
AS OF SEPTEMBER 2004, THE COMPANY EXECUTED A BUY OUT OPTION UNDER A
DRUG TESTING FEE AGREEMENT WITH GLOBAL SCREENING, INC. WHEREBY FOR
THE SUM OF $138,520 THE COMPANY PURCHASED A CUSTOMER LIST AND THE
RIGHTS THERETO THAT THE COMPANY HAD PREVIOUSLY SERVICED UNDER A
DRUG TESTING FEE AGREEMENT WITH GLOBAL SCREENING, INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
NUMBER DESCRIPTION OF EXHIBIT
31.1 Certification of Executive Chairman, President and Chief Executive
Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes Oxley Act of 2002
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Accufacts Pre-Employment Screening, Inc.
By: /s/ PHILIP LUIZZO
---------------------
Philip Luizzo, Chairman,
Chief Executive Officer, and
President
DATE: NOVEMBER 12, 2004
Page 9